Nicaragua May Break Taiwan Ties

MANAGUA, NICARAGUA — Nicaragua will soon break relations with Taiwan and allow the Peking government to open an embassy here, senior foreign diplomats say.

The Nicaraguan decision, which has not been officially announced, would be the most significant result of a diplomatic offensive Peking has undertaken in Latin America in recent months.

Prime Minister Zhao Ziyang is touring the region and has already signed a commercial agreement with Venezuela, pledged to increase trade with Argentina and expressed interest in buying military equipment from Brazil.

A Chinese delegation visited Mexico last week to pursue plans for a $200 million mining project there.

In the last three months, Chinese diplomatic efforts have persuaded two other nations in the hemisphere to break ties with Taiwan and recognize Peking. Bolivia did so in July, and Grenada followed at the end of September.

Nicaragua would be the first country in Central America to take such a step. The region has been regarded as one of Taiwan`s last bastions of diplomatic support. There are fully accredited Taiwanese Embassies in Guatemala, El Salvador, Honduras, Costa Rica and Panama.

Though strongly anti-Communist, Taiwan has been providing aid to the leftist Nicaraguan government since soon after the Sandinistas came to power in 1979. It had previously aided the regime of Anastasio Somoza Debayle.

Much of the aid sent during the Sandinista period has been used to run a large experimental farm in the northern province of Matagalpa. Diplomats said Nicaragua would probably seek aid from Peking to compensate for the loss of assistance from Taiwan.

``They`re going to sell this thing,`` a diplomat said, ``and if they don`t get what they want from Peking, the whole deal could fall through. But that looks unlikely at this point.``